Liberty gets DirecTV stake for slice of News Corp.

Controlling interest in DirecTV and three sports networks: $11 billion. Getting John Malone out of your life: priceless.

Rupert Murdoch secured undisputed control of News Corp.[1] by buying back 16.3 percent of his own company’s stock amassed by Malone’s Liberty Media[2].

In exchange, Murdoch is surrendering his 38.5 percent stake in DirecTV Group[3]; his control of Fox Sports Network (FSN) Rocky Mountain (Denver), FSN Northwest (Seattle) and FSN Pittsburgh regional sports networks; and $550 million in cash.

DirecTV CEO Chase Carey, a former News Corp. executive, will stay on to lead the DBS TV service.

The transaction, already unanimously approved by the boards of both News Corp. and Liberty Media, is expected to close in mid-2007. Still pending are shareholder and regulatory approvals. Malone typically structures transactions to pay the absolute minimum of taxes possible; this deal is no different, and Liberty Media said it will also require a ruling by the IRS.